In opinion of FX Strategists at UOB Group, USD/CNH could grind lower and tests the 6.6450 level in the next weeks.
Key Quotes
24-hour view: “While we expected USD to weaken yesterday, we held the view that ‘any weakness is likely limited to a test of the month-to-date low of 6.6788’. The subsequent weakness exceeded our expectation as USD plummeted to a low of 6.6700. The rapid decline is oversold, but we see room for another down-leg towards 6.6580 before the current weakness should stabilize. Resistance is at 6.6850 followed by 6.6930.”
Next 1-3 weeks: “We highlighted yesterday (19 Oct, spot at 6.6930) that USD ‘is likely to trade with a downward bias towards 6.6710’. However, USD dropped quickly to a low 6.6700. Downward momentum has improved further and the next level to focus on is at 6.6450. Overall, USD is expected to stay under pressure unless it can move above 6.7050 (‘strong resistance’ level was at 6.7300 yesterday).”
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